Cash is king with ADIs – but is it really the most efficient way to take payment for a lesson? We round up some of the best alternatives to taking cash. All of these solutions have no ongoing contractual costs so you can try them out pretty much risk free.
The benefits of only accepting cash speak for themselves – but once you factor in the inconvenience of writing out receipts, manual bookkeeping and the need to visit your bank in order to pay money in, the hassle involved starts to add up. More importantly, just how secure do you feel carrying your earnings round with you all day long? Recent advances in technology mean there are now plenty of affordable cash alternatives that could be more effective and offer more security. Plus, the more methods of payment that you offer, the more likely you are to make that sale.
Direct Debit, Bank Transfers and GoCardless
Although bank transfers and direct debits are an incredibly cheap way of transferring funds, they can be a hassle for disorganised pupils (or their parents). Also, it’s very difficult for small businesses to get bank approval to accept direct debits unless you go through an BACS bureau and are willing to pay their fees.
This has now changed with the arrival of GoCardless, a service that makes it cheap and simple for anyone to take Direct Debit payments online. You only pay 1% of the transaction value (which is capped at a maximum of £2). All payments are paid out 3 working days from when the payment was collected. There are no setup costs – which makes it a low-risk option to try out and a great alternative to PayPal.
Mobile Card Readers
Mobile card readers have been around for quite a few years but are now becoming increasing popular and more affordable than ever before. iZettle and WorldPay Zinc stood out as the two favourites with ADIs. Both offer a more modern payment method – sign up and you’ll be sent a portable chip-and-pin card reader that, when used in conjunction with your smartphone, can take payments in-car quickly and let you text or email a receipt to your pupil.
Both services require you to buy the card reader in the first instance plus ADIs should also consider the transaction rates – expect to pay between 1.50% and 2.75% per transaction depending on the amount of sales. Funds are cleared and released into your account within 3-4 working days (which is prompt when compared to other providers).
“I use WorldPay Zinc and it works brilliantly. You can also take ‘cardholder not present’ payments with the service. Ninety percent of my payments are now made via card.”
– Allen Hird, 121 Driving Success, Leeds
Mobile Phone Based Payments
Imagine if sending money was as easy as sending a text message. That’s basically how mobile phone based payments work. Solutions like M-Pesa have already revolutionised payments in third world countries - now systems such as Barclays PingIt and more recently, Paym are doing the same here in the UK. There’s no need to set up direct debits or hand over bank account details; instead payments are made by the pupil entering your mobile number via their mobile banking app, selecting the amount to be paid and sending it directly to you. It’s quick and efficient. Plus, participating banks don’t charge anything to use the Paym service - which means there’s no transaction fees and it’s free to register.
Here’s a clip of the BBC’s Rory Cellan-Jones doing a great walkthrough of the Paym process.
The main barrier to Paym is that your pupils must have already registered for the service through their bank – however this only takes a matter of minutes. There is a sending limit of up to £250 a day, although it is possible to be offered a higher daily limit. Also, some banks including Natwest have yet to implement the Paym service but are committed to adopting it in the near future. Despite these drawbacks, we feel that if your bank supports Paym, you’d be missing a trick if you don’t sign up.
“All they have to do is log into their account and they can transfer the money using my mobile number before or at the start of the lesson. I then automatically get a text confirming the payment.”
– Tina Cassady, Fab Driving, Nottingham
What did we miss?
What method of payments do you accept? Is there a good alternative to cash payments that you use that we’ve missed? Let us know what you think in the comments.